Chen Hsong making headway against rivals in Europe, Japan

After several years of trying, Hong Kong machinery conglomerate Chen Hsong Holdings Ltd. said it is starting to achieve significant growth in exports in places that are considered strongholds of European and Japanese machine makers.

Executives at the publicly traded company, one of the two largest injection press makers in China, said during interviews at Chinaplas 2005 in Guangzhou that efforts to establish a stronger global presence are starting to pay off.

Chen Hsong's most recent publicly available numbers show a 58 percent jump in international sales.

While those figures are a bit dated, covering the six months ended Sept. 30, company officials said they continue to push exports.

Customers in countries like Germany and Japan are becoming more ``market oriented'' in their purchasing decisions, looking at pricing and relying less on machines made by homegrown firms, which opens up opportunities for Chen Hsong, said Jack Chen, senior manager of regional sales.

``For overseas markets, we have to develop our reputation and we have to expand our customer base,'' he said.

The company has launched sales offices and service centers around the world in recent years, and developed hybrid machines and networked control systems to boost competitiveness.

Chen Hsong saw international sales - which it defines as outside China and Taiwan - grow from HK$107 million (US$13.7 million) in the six-month period in 2003, to HK$169 million (US$21.7 million) in the same period in 2004.

International sales amounted to a little less than 17 percent of total sales, but grew much faster than the 20 percent growth in China and the 19 percent growth in Taiwan.

China accounted for about 71 percent of sales, and Taiwan was about 12 percent.

``The group has successfully penetrated a number of markets in Europe, South America and the Middle East [which are] strongholds of traditional high-end European and Japanese machinery,'' the company said.

``This strategic investment is entering a harvesting stage.''

The company would not provide more up-to-date numbers until 2005 financials are released later this year, said spokeswoman Amy Leung.

Last year, the company faced challenges from the Chinese government's tightening of credit, designed to keep the fast-growing economy from overheating. While that remains a concern, the Chinese economy will continue to see good growth and appears to be heading for a soft landing, rather than a hard crash, as a result of the austerity measures, Chen said.

He added that the company is examining the feasibility of manufacturing outside of Asia, and is looking closely at Eastern Europe and the Middle East.

``It is not as simple as locating a factory in China,'' he said.

The company last year finished two significant expansions on the mainland, in Shenzhen and Ningbo.

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